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Revista mexicana de ciencias agrícolas

versão impressa ISSN 2007-0934

Rev. Mex. Cienc. Agríc vol.7 no.2 Texcoco Fev./Mar. 2016

 

Articles

Profitability chile apple (Capsicum pubescens R Y P) produced in greenhouses in Texcoco, State of Mexico

Luis Enrique Espinosa-Torres1  § 

Orsohe Ramírez-Abarca1 

1Universidad Autónoma del Estado de México-Texcoco. Av. Jardín Zumpango s/n, Fraccionamiento El Tejocote, Texcoco, Estado de México. C. P. 56239. México. (orsohe@yahoo.com).


Abstract

In this research an economic analysis that determined the profitability of production of chile apple produced under greenhouse conditions in Texcoco, State of Mexico is presented. It was found that the production of greenhouse and open field has been increasing. The financial indicators are obtained: VAN= $799 594 88; RB/C= 2.07; TIR= 45.53%; These results show that the production has been profitable and viable. Also, the sensitivity analysis allowed the observation that would support an increase of 5 and 10 units in the interest rate and prices remained normal, the project also allows a decrease in 5 to 10% price but without the interest rate change.

Keywords: chile apple; economic evaluation; greenhouse; production; profitability

Resumen

En el presente trabajo de investigación se presenta un análisis económico que determinó la rentabilidad de la producción de chile manzano producido bajo condiciones de invernadero en Texcoco, Estado de México. Se encontró que la producción a campo abierto y de invernadero ha ido en aumento. Los indicadores financieros que se obtuvieron son: VAN= $799 594 88; RB/C= 2.07; TIR= 45.53%; estos resultados manifiestan que esta actividad productiva ha sido rentable y viable. Así mismo, el análisis de sensibilidad permitió observar que soportaría un aumento de 5 y 10 unidades en la tasa de interés y que los precios se mantuvieran normales, además, el proyecto permite un descenso en 5 y 10% de los precios pero sin que la tasa de interés se modifique.

Palabras clave: chile manzano; evaluación económica; invernadero; producción; rentabilidad

Introduction

The consumption of various vegetables in Mexico has grown along with the production of the same. However, there is a growing potential for one of the most important vegetables, chili fruit demand (Capsicum spp.), That the culture of the Mexicans in the table of most families across the country and even beyond our borders.

Chili is a key ingredient and representative of the Mexican diet, which is regarded as the first crop domesticated in the Americas. Integration of indigenous and European culture, widely contributed to the diversification of forms of consumption and produces virtually all of Mexico (Lopez, 2007). One of the species of chile that has adapted to environmental conditions in Mexico is the chile apple (Capsicum pubescens R and P). It originated in the highlands of South America and Mexico recently introduced a favored for its ability to adapt to cold places, where no other type of chile thrives (Laborde and Pozo, 1982).

In particular, chile apple is grown and consumed in high and cold areas of the country, at altitudes of 1 700- 2 400 m (Pérez and Castro, 1998). It is an underexploited species from the highlands of Peru and Bolivia (Pérez and Castro, 2008) and widespread Mexico to Argentina (Garcia et al., 2013). However, production in Mexico is characterized as primarily temporary, causing a concentration of production in the months of August to December and an almost absolute lack of January to July.

We must take into consideration that the value and volume of agricultural production are important elements in the development of agricultural producers, since that directly affect the income of these (Terrones and Sanchez, 2011). Added to this, Espinosa (2010) mentioned that even if new technologies that improve the quality of products, improper handling, deterioration and lack of knowledge and investment in postharvest develop, among others, many products do not arrive leading to their final destination by this severe economic losses to producers, traders and consumers sometimes.

Therefore, a choice of production systems have emerged in the last 10 years, including intensive chile apple under greenhouse conditions and open to the use of drip irrigation, among other technological components field is. These variants are production systems that generate higher quality and yield of fruit. In this regard, there are publications where it is concluded that intensive production systems have advantages not only in the quality and quantity of harvested product, but also on the opportunity of production (Perez and Castro, 1998; Perez et al., 2004).

Espinosa and Villa (2008) mention that the main production areas are located in the state of Michoacan, Puebla, State of Mexico and Veracruz, Chiapas and Oaxaca lesser scale. Its use is irreplaceable in areas of the mountains north of Puebla, Toluca, Morelia and Michoacan, where part of the production under greenhouses alimenticios.La habits is one of the branches of agriculture more energy consumed, the cost of employee energy consumption in greenhouses varies between 20-40% of the total cost depending on the type of production. In Mexico there are different levels of technology distributed throughout the country, ranging from open field production to high-tech greenhouses with different climate control systems. The high-tech production has high yields with high quality with optimal use of technology in an environmentally friendly scheme (Salazar et al., 2012).

Ramirez et al. (2015), said that with regard to what concerns analyzing the profitability of any economic activity is not easy to understand because different economic agents such as those that supply the various production inputs involved even the marketing agents that play an outstanding role in the level of profitability of production Mexico.

In this situation it is necessary to know the profitability chile apple production under greenhouse conditions in Texcoco, State of Mexico, in the period 2003 to 2013. This was achieved once the structure of costs and total revenue was quantified production; profitability indicators were calculated; breakeven production of chile apple greenhouse was determined and; a sensitivity analysis was performed to know the variations in the project.

Materials and methods

This research was conducted considering the methodological instruments of investment projects (Muñante, 2004). information operating costs and revenues that were developed in the experimental farm field Autonomous University Chapingo (UACH), State of Mexico, Texcoco, where they directly evaluated the intensive production system under greenhouse conditions was collected, which is it generated by collecting information concerning the quantification of economic activity. The method used for calculation of financial indicators was the successive approximation proposed by Barrios y Portillo (1989). The mathematical expressions of these indicators are:

The equilibrium point which was obtained as follows:

P.E. (VV)= CF/1-(CV/IT) 1)

Qeq= P.E. (VV)/(IT/UV) 2)

Where: P. E. (VV)= break even on sales value; Qeq= equilibrium production (t ha-1); CF= fixed production cost ($ ha); CV= variable cost of production; IT= total income ($ ha); UV= units sold (t ha-1).

For the calculation of the indicators of economic evaluation they were calculated according to the formulas presented below:

The cost benefit:

RBC=t=1nBn ÷[(1 + i)n] ÷[Cn ÷ (1 + i)n]

Net present value:

VAN= t=1n(Bn - Cn) ÷ (1 + i)n

0= t=1n(Bn - Cn) ÷ TIR

Where: Bn= benefits each year; Cn= costs each year; n= number of years; i= discount rate.

Internal rate of return:

The equation is expressed as:

TIR= t + (T - t)[FCAt ÷ FCAt - FCAT]

Where: t= lower rate; FFAt= discounted cash flow to the lower rate; T= higher rate; FFAT= discounted cash flow to the higher rate.

Results and discussion

Chile apple production in Mexico

In Mexico chile apple is known as chile perón and wax, which is grown in Michoacan this product production data open for the years 2004-2011 field is obtained.

In Table 1 it can be seen that the area planted green chile apple open nationwide field there is an increase from 2004 to 2011. It is also noted that green chile perón is not sown in the state of Mexico, in contrast is observed the chile apple is planted only in the State of Mexico and in the greenhouse, this is due to the regional name that is given to chile apple. On the other hand, it can be noted that in 2006 perón chile planting was the highest to reach 361 hectares planted.

Table 1 Comparative planted the open surface and national greenhouse vs. State of Mexico (hectares). 

Año Nacional Estatal
Chile verde perón Chile verde manzano Chile verde manzano de invernadero Chile verde manzano Chile verde manzano de invernadero
2004 275.8 143 0 143 0
2005 141 90 0 90 0
2006 361 150 0 150 0
2007 336 65 1 65 1
2008 214 72 2 72 2
2009 89 2 0 2 0
2010 226 2 0 2 0
2011 283 40 4 40 4

Fuente: elaboración con datos de SIACON, 2012.

In Table 2, the amounts of production volumes between Peron and chile chile apple are very different because the first production exceeds that of the second lot. Likewise, you may notice that greenhouse production is still lower than that of open field and the data we have are not constant because of having production in 2007 and 2008, production is interrupted until the year 2011, which may indicate that a new cycle of production started in greenhouses or data are not available for that period.

Table 2 Volume of production of chile apple, national comparative vs State of Mexico (tonnes). 

Año Nacional Estatal
Chile verde perón Chile verde manzano Chile verde manzano de invernadero Chile verde manzano Chile verde manzano de invernadero
2004 2 852.8 652 0 652 0
2005 1 0992 450 0 450 0
2006 2 657 5 825 0 825 0
2007 2 488 537.5 40 537.5 40
2008 931 690 9 25 690 9 25
2009 659 29.1 0 29.1 0
2010 879.1 26 0 26 0
2011 2 039.3 0 140 0 140

Fuente: elaboración con datos de SIACON, 2012.

The Table 3 shows that for the chile perón is that performance remained constant between 2005, 2006 and 2007 with a drop of about 57% for 2008, recovering in 2009 but stability since for the following year a decrease was observed newly. In contrast, the performance of chile Apple has a tendency to rise as to produce in 2004, 4.6 tons per hectare; in 2009 it reached its maximum production to reach 14.6 tons per hectare.

Table 3 Performance chile apple production nationwide and states of Mexico (t ha-1). 

Año Nacional Estatal
Chile verde perón Chile verde manzano Chile verde manzano de invernadero Chile verde manzano Chile verde manzano de invernadero
2004 10.3 4.6 0 4.6 0
2005 7.8 5 0 5 0
2006 7.6 5.5 0 5.5 0
2007 7.4 8.3 40 8.3 40
2008 44 96 12.5 96 12.5
2009 77 14.6 0 14.6 0
2010 3 9 13 0 13 0
2011 72 0 70 0 70

Fuente: elaboración con datos de SIACON, 2012.

Production value

The Table 4 shows that the output value increases as the greater the increase in production; that is, that the higher output, greater production value. However, it can be considered that the instability of the production has an impact on the rural price which makes the value of production vary significantly.

Table 4 Production value chile apple, national comparative vs State of Mexico (pesos). 

Año Nacional Estatal
Chile verde perón Chile verde manzano Chile verde manzano de invernadero Chile verde manzano Chile verde manzano de invernadero
2004 34 903 600 11 340 000 0 11340000 0
2005 9 282 000 9 000 000 0 9 000 000 0
2006 29 127 500 17 250 000 0 17 250 000 0
2007 34 686 000 15 162 500 400 000 15 162 500 400 000
2008 12 162 200 3 736 140 77 500 3 736 140 77 500
2009 5 046 000 160 050 0 160 050 0
2010 7 194 620 78 000 0 78 000 0
2011 16 255 202.7 0 1 750 000 0 1 750 000

Fuente: elaboración con datos de SIACON, 2012.

Rural chile apple prices in Mexico

In the Table 5 shows that the average rural price has obvious variation, since as mentioned, the price is fixed with based on the demands and needs of the market, which is why it depends on various factors, such as supply substitutes or other producers, consumer demand, needs, tastes and preferences much, spending that it can allocate the consumption of different vegetable products. It also shows that the average price of rural average price for the period 2004-2011 was $10 307.1 for chile apple open field; however, the average price for greenhouse chile apple was $8 533.3.

Table 5 Rural Average price attached to chile apple production (pesos). 

Año Nacional Estatal
Chile verde perón Chile verde manzano Chile verde manzano de invernadero Chile verde manzano Chile verde manzano de invernadero
2004 12 234.9 17 392.6 0 17 392.6 0
2005 8 444.3 20 000 0 20 000 0
2006 10 960.5 20 909.1 0 20 909.1 0
2007 13 941.3 28 209.3 10 000 28 209.3 10 000
2008 13 063.6 5 408 3 100 5 408 3 100
2009 7 657.1 5 500 0 5 500 0
2010 8 184.2 3 000 0 3 000 0
2011 7 971 0 12 500 0 12 500

Fuente: elaboración con datos de SIACON, 2012.

Now, the best price for chili perón was reached in 2007, even though production was higher in previous years however as mentioned the price depends on variables involved in the process of production and marketing and that there was improved performance in production, but also can occur because maybe in that year product demand was higher, so its price went upward.

Financial evaluation

For this production system cited the same methodology is applied, for the period covered by the TIIE it is 2011, so the average interest rate is 4.8% and the period of assessment and analysis is 10 years making a summation of all fixed and variable costs and revenue of 10 years comprising two production cycles, therefore the discount rate applied was 13.45%.

In the Table 6 presents the financial analysis with prices and constant costs shown in a span of 10 years. Likewise, the investment was $237 371.83 in the first year; for the year 6 will have to reinvest in fixed assets because the useful life of fixed assets in order to start production of the production cycle of the sixth year, with this information the financial indicators were determined taking the following results is completed: the benefit-cost ratio (RB/C) obtained was 2.07 which indicates that for every peso invested will earn $1.07 during the life of the project, ie, for every peso invested will yield additional value of $1.07 plus bank interest.

Table 6 Calculation of financial indicators for system chile apple production under greenhouse conditions. 

Año CF CV CT I FF FA CA IA FFA
0 237371.8 67 698.4 305 070.2 31 123.7 -273 946.5 1 305 070.2 31,123.7 -273,946.5
1 69918 9 69918.9 193 023.7 123 104.8 0.9 61 548.3 169915.2 108 366.9
2 72 708 7 72 708 7 293 222.3 220 513 6 0 8 56 341 6 227 216 7 170 875 1
3 75 406.2 75 406.2 290 627.8 215 221.6 0.7 51 436 6 198 245 146 808 4
4 80 186 9 80 186 9 241 166 1 160 979 1 06 48 1493 144811.4 96 662.1
5 83 001 5 83 001 5 250 387 7 167 386 2 05 43 872 7 132 349 2 88 476 5
6 46 692.3 86 603 7 133 296 226 890 4 93 594.4 05 62 022 2 105 571 4 43 549 2
7 89 868 7 89 868.7 141 884 4 52015 7 04 36,809 5 58 114.7 21 305 2
8 73 344 4 73 344 4 357 810 5 284 466 04 26 444 8 129 010.9 102 566.1
9 73 344 4 73 344 4 351576 278 231.6 03 23 278 9 111 587.2 88 308.3
10 73 344 4 73 344 4 351576 278 231 6 03 20 492 98 228.1 77 7362

Donde: CF= costo fijo; CV= costo variable; CT= costo total; I= ingresos; FF= flujo de fondos; FA= factor de actualización normal; CA= costos actualizados; IA= ingresos actualizados; FFA= flujo de fondos actualizados normal; FA= factor de actualización al 45.5%; FFA= flujo de fondos al 45.5%.

The net present value (VAN) indicated that the project has a current $799 594.88 regardless of bank interest total profit. As regards the internal rate of return (TIR) was 45.5%, which means that is the maximum discount rate that can support the project; or the maximum percentage that would pay the producer for credit. 45.5% is a high percentage, noting that the project is economically viable given the set financial expectations. All this coincides with Espinosa (2014) who found that the financial evaluation of an intensive system in the east of the State of Mexico was profitable.

According to the equations of equilibrium point and substituting the values described must break even by year (Table 7). It is noted that from a production of 1.5 t/1 500 m2 in the second year the benefits outweigh the costs of production and therefore growing chile apple starts to be profitable in this system, however the producer has they get from selling at least $23 952 00; above, it indicates that under conditions prevailing price and performance, costs and benefits of chile apple equalized at that point of equilibrium.

Table 7 Breakeven chile apple under greenhouse conditions. 

Año PE (vv) ($) Qeq(kg)
2005 23 952.00 1 516
2006 21371.00 956
2007 22 485.00 973
2008 26 336.00 1288
2009 27 222.00 1 358
2010 30 529.00 1 373
2011 50 699.00 1 862

Donde: PE (VV)= punto de equilibrio del valor de ventas y Qeq= punto de equilibrio en producción.

It should be noted that the profitability of a chile apple production is largely due to technical assistance, high yields, product quality, appropriate technology for production and market development. This coincides with that reported by Sangerman et al. (2009) and Sangerman et al. (2013).

Sensitivity analysis

In the Table 8 shows the effect it can have the project in relation to the net present value, if any disminuyeran prices 5 to 10% and the interest rate is normal or well maintained will increase by 5 to 10 percentage points is observed. Chile apple production under greenhouse conditions presents a situation with little sensitivity, since the project would support an increase of 5 and 10 units in the interest rate and prices remained normal, the project also allows a decrease in May and 10% of the price but not the interest rate is changed. Which shows that the production of vegetables under protected conditions, regardless of the level of initial investment, is still profitable to these possible market scenarios.

Table 8 Sensitivity analysis. 

P\r r normal R ▲ 5% VAN ($) r ▲ 10%
Ρ normal 1000 004.91 744 361.57 561711.06
▼TP 5% 908 571.91 670 707 37 500 854 48
▼TP 10% 815 990.51 596311.52 439 510.25

Espinosa (2013), mentioned that the fixed costs of production in open field systems are lower than emissions, which implies a strong investment for intensive system although it is paid for the life of the productive infrastructure.

Similarly suggests the formation of a national association of producers of chile apple for regulating the supply and demand says that they can find new international markets for the benefit of producers; since the opening of international markets are foreign exchange earner for the agricultural sector and allow greater economic benefit to producers of chile apple.

In turn Espinosa et al. (2014) the product gases have more quality than open field, thereby facilitating their access to international markets, although the marketing margin for the producer is low can be increased if there is a direct relationship with the final agents. Producer participation in the final sales price is limited by the participation of commercial agents and such agents increase the level of participation decreases, so it is proposed to eliminate marketing agents.

In turn Almaguer et al. (2012) conducted a cost benefit analysis of vegetables in Mexico City and found that the production of central Mexico, has advantages compared to other states in Mexico because of its proximity to consumption centers mainly the valley of Mexico (place where this research was conducted) and the development of local markets, quality production and transportation costs are not as high.

Conclusions

The chile apple production was evaluated under greenhouse conditions in Texcoco, State of Mexico, in the period 2004-2014 which yielded the result that the project is economically viable, but if you require a large investment to start production of the vegetable.

The profitability indicators were determined, which showed that the VAN was $799 594.8; RB/C was $2.07; TIR of 45.5%; These results show that the production has been profitable under this production mode.

The sensitivity analysis allowed the observation that would support an increase of 5 and 10 units in the interest rate and prices remained normal. The project also allows a decrease in 5 to 10% price but not the interest rate is changed and this indicated that this activity is economically stable.

The consumer takes chile apple in Mexican cuisine and is part of Mexican culture, makes the product a viable treatment option for production and business units production because Mexican society is very demanding of spiciness in foods.

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Received: October 2015; Accepted: January 2016

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